Prices, Unit Values and Local Measurement Units in Rural Surveys: an Econometric Approach with an Application to Poverty Measurement in Ethiopia
AbstractFor many research problems in developing countries, some information on prices faced by households is required, for example if subsistence consumption is a substantial part of consumption. These prices are not readily available from household surveys, and at times they are not easily observed, for example if markets are thin and systematic price information can only be observed from markets some distance away from communities. Furthermore, quantities consumed and produced are often in local units presenting further problems for the analysis. We provide an econometric approach to estimate prices and quantity conversion factors from household expenditure data, using data from rural Ethiopia to illustrate the approach. In an application, we show that the conclusions about poverty changes over time are significantly affected by using alternative strategies to convert local units and to value subsistence consumption. We find in our case that mean unit values result in the overestimation of prices due to outliers and other sources of measurement error. Exogenous consumer price sources, often collected at larger markets outside the village, tend to give slightly lower values than our estimates. Copyright 2006, Oxford University Press.
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Bibliographic InfoArticle provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.
Volume (Year): 15 (2006)
Issue (Month): 2 (June)
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Other versions of this item:
- Bart Capéau & Stefan Dercon, 1998. "Prices, Unit Values and Local Measurement Units in Rural Surveys: an Econometric Approach with an Application to Poverty Measurement in Ethiopia," Center for Economic Studies - Discussion papers ces9818, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Bart Capéau & Stefan Dercon, 2004. "Prices, unit values and local measurement units in rural surveys: an econometric approach with an application to poverty measurement in Ethiopia," Public Economics Working Paper Series puvlmurs, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
- D4 - Microeconomics - - Market Structure and Pricing
- I3 - Health, Education, and Welfare - - Welfare and Poverty
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
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